Compulsory Client Money Protection will be the law from next April 1.
Yesterday, the Government laid regulation which, if approved by Parliament, will require all letting agents in England to have CMP.
However, the timing of compulsory CMP throws some doubt on when the tenant fee ban will be implemented.
Previously, the Government has said that compulsory CMP will be implemented first, so that if any agents go out of business as a result of the ban, arrangements would be in place to protect clients. Yesterday, ARLA Propertymark said this was also their understanding.
From next April, local authorities will have the powers to fine agents up to £30,000 if they do not belong to an approved scheme; and fine agents up to £5,000 if they do not display details of their CMP scheme both in their offices and on their websites.
David Cox, chief executive of ARLA, said: “After a long fight, ARLA Propertymark’s campaign for mandatory Client Money Protection is finally won.
“With the help of Baroness Hayter of Kentish Town, and cross-party consensus in the House of Lords, this is a vital step forward in improving consumer protection in the rental sector; probably more so than the myriad of other laws passed over the last two decades. We look forward to working with the Government to guarantee that the level playing field we’ve fought so hard to create becomes a reality on April 1 next year.”
Gerry Fitzjohn, chairman of The Property Ombudsman board, said: “The Property Ombudsman supports today’s announcement from the Government that Client Money Protection will be compulsory for property agents.
“Ultimately it will make the sector a fairer place for consumers, and we look forward to this coming into effect next year.”
John Midgely, chair of SAFEAgent, said: “This new law is a huge win for the consumer. It’s been a long hard road to mandatory CMP but we’re delighted our hard work paid off andn we’re finally here.”
Isobel Thomson, CEO of NALS, said it was an important milestone for the industry, “following too many cases of rogues and criminals taking money from innocent tenants and landlords”.